To retain employees, create a home-like
Remember the old adage, "Good help is hard to find"?
That's especially true for small businesses, most
of which can't match the salary and benefit packages of their corporate
But smaller companies may have an advantage when it
comes to creating the kind of work environment that attracts and
keeps the best and brightest.
"Retention is just a huge issue right now," says Lisa
Audi, compensation specialist with Buck
Consulting Inc. in Chicago. "As a result, the workplace is becoming
a nicer place. I think that employers are realizing that they need
to treat employees well. It's not the past attitude of, 'You're
lucky to be here.'"
Carol Geffner, regional vice president of Right Management
Consultants in Irvine, Calif., agrees that the patronizing attitude
is gone the way of the dinosaur.
"You can't do that anymore," she says. "The people
who do that lose their employees."
The cultural revolution
How did a formerly "soft" issue like work environment suddenly move
to the top of the CEO's agenda? In a word, turnover.
"The cost of turnover is a tremendous cost," says
Audi. Some experts estimate it's about 75 percent for a nonexempt
employee and as much as 150 percent for an exempt, factoring in
"In this economy, for a lot of companies, their
main assets are their employees," says Audi. "I think
it has reached the executive offices that this is what we need to
do to remain competitive."
"I would say it is still a very small percentage of
CEOs that truly understand how to implement and build a culture
that is geared toward recruiting and retaining," says Geffner. "However,
more people are becoming aware of the notion of culture because
now it's a business issue. It's about performance."
Nobody is suggesting that free sodas in the break
room, health food in the vending machines or music in the cubicles
alone will lure in all-star players. But creating a corporate culture
that is sensitive and flexible enough to cater to those little touches
"I have had meetings where the client has said their
culture is to provide free beverages or once-a-week free lunches
and they want to know if it is competitive in the marketplace,"
says Audi. "You can't really say this is the reason someone will
come to an organization or someone will stay, but it does fit into
the overall amenities that you get with an organization, and that
is becoming more prevalent."
Kenny Kahn, vice president of marketing for Muzak,
says the winners in today's recruitment wars will be those companies
that pursue a positive corporate culture in the same way one might
brand a product.
"Every business wants to create its own unique experience
for its employees. They want to create the best corporate culture
they can possibly create," he says.
There's no place like home
Looking for a model for the new corporate culture? Start at home.
In human resources lingo, the catch phrase is "work-life
balance," shortened to work-life for talking purposes. Employers
today increasingly face the work-life issue on two fronts:
- Creative scheduling that allows employees to work
more from home; and
- Flexible workplace policies that make the office
more like home.
The former can be a strong drawing card for a small
business competing against corporate giants. Especially popular
today are telecommuting, four-day work weeks, flex time and part-time
employment tied to continuous growth that allows workers to take
time off to have children or pursue education without sacrificing
"Looking at the total compensation picture, smaller
companies can leverage what they have to offer through flexible
arrangements and work-life balance, because they can't always afford
to pay as much as a Fortune 500 company," says Audi. "With fewer
employees, there is definitely more flexibility in what you can
Ironically, says Audi, at some companies today, it
is more common to find managers on site than employees. "At a certain
level, you just have to be there to have face time with your employees,"
From small things, big things
Smaller companies also may have an edge in creating a work environment
with all the comforts of home. In addition to helping retain valuable
employees, a homelike corporate culture also may increase productivity.
A small little pop-and-pop shop you may have heard
of called Microsoft was built on free caffeine throughout its Redmond,
Wash., campus. Some Japanese corporations use aromatherapy to keep
workers alert. And background music has been shown to increase productivity
by 5 percent, according to a 1996 study published in the April issue
of HR Magazine.
Kahn says Muzak no longer touts productivity as a
benefit of its product. The company long ago did away with "elevator
music" and today offers the world's largest library of original
recordings broken down into 10 genres. Most of their 300,000 U.S.
customers are small businesses that find the monthly fee well worth
"We believe that music is incredibly powerful and
the right music will create the right experience at a business,"
says Kahn. "If an employee is happy and that makes them more productive,
that's great. People spend more time at work than they do at home
and people love music. Great music is going to have a great impact
on how people feel about where they work."
The advantage of these environmental amenities for
small businesses may be obvious: most are inexpensive. The key to
their effectiveness is making sure they meet employee needs and
that top management buys in 100 percent.
"If the CEO is relying on cosmetic environmental additives,
whether it be a cappuccino machine or music in the lunch room, it's
not going to work," says Geffner. "If you are putting those things
in the workplace as a small piece of a larger initiative, then they
matter. A small business can't have all the bells and whistles necessarily,
but they can do a lot. They can find out what's important to their
people, they can walk the talk, and that doesn't cost money."
Audi says the small sums spent on home-life pay big
returns in retention.
"If you can't offer the best in terms of pay or benefits,
then you have to offer a counterbalance to keep people enthused,"
she says. "Some people are interested in going where they make the
most money or have the best benefits; others are interested in having
that balance. High pay can rarely compensate for a negative work
Jay MacDonald is a contributing editor
based in Mississippi.
-- Updated: Aug. 14, 2003